2007 Annual Report - Ameristar Casinos, Inc.

Historically, we have funded our daily operations through net cash provided by operating activities and oursignificant capital expenditures primarily through operating cash flows, bank debt and other debt financing. Webelieve that our cash flows from operations, cash and cash equivalents and availability under our senior creditfacilities will be able to support our operations and liquidity requirements, including all of our currently plannedcapital expenditures and dividend payments on our Common Stock. However, if our existing sources of cash areinsufficient to meet such needs, or if we fail to remain in compliance with the covenants applicable to our seniorcredit facilities, we will be required to seek additional financing, scale back our capital plans and/or seek anamendment to the senior credit facilities. Any loss from service of our riverboat and barge facilities for any reasoncould materially adversely affect us, including our ability to fund daily operations and to satisfy debt covenants. Ourability to borrow funds under the senior credit facilities at any time is primarily dependent upon the amount of ourEBITDA, as defined for purposes of the senior credit facilities, for the preceding four fiscal quarters.Off-Balance Sheet ArrangementsWe do not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Securities and ExchangeCommission Regulation S-K.Contractual and Other CommitmentsThe following table summarizes our material obligations and commitments to make future payments undercertain contracts, including long-term debt obligations, capitalized leases, operating leases and certain constructioncontracts.Contractual Obligations (in Thousands) : 2008 2009-2010 2011-2012 After 2012 TotalLong-term debt instruments..................................... $ 4,337 $ 1,261,027 $ 380,416 $ 172 $ 1,645,952Estimated interest payments on long-term debt (1) ... 78,382 188,184 40,326 — 306,892Operating leases....................................................... 5,548 7,211 5,896 603 19,258Material construction contracts................................ 107,780 71,769 — — 179,549Total......................................................................... $ 196,047 $ 1,528,191 $ 426,638 $ 775 $ 2,151,651____________(1) Estimated interest payments on long-term debt are based on principal amounts outstanding after giving effect toprojected borrowings in 2008 and forecasted LIBOR rates for our senior credit facilities.Amount of Commitment Expiration Per Period (in Thousands)Other Commitments: 2008 2009-2010 2011-2012 After 2012 TotalLetters of credit........................................................ $ 5,364 $ — $ — $ — $ 5,364Our cash tax payments for 2008 are expected to be approximately $50.0 million. As further discussed in “Note 4- Federal and state income taxes” of Notes to Consolidated Financial Statements, we adopted the provisions ofFinancial Accounting Standards Board Interpretation No. 48 (“FIN 48”), on January 1, 2007. We had $28.9 millionof unrecognized tax benefits as of December 31, 2007. Due to the inherent uncertainty of the underlying taxpositions, it is not possible to assign the liability as of December 31, 2007 to any particular years in the table.As noted above, a significant operating use of cash in 2008 is interest payments. Our cash interest payments,excluding capitalized interest, were $72.2 million, $73.8 million and $59.1 million for the years ended December 31,2007, 2006 and 2005, respectively. Cash interest payments may increase in 2008 as a result of a possible rise ininterest rates and an expected increase in the average outstanding debt balance from anticipated borrowings underthe $1.4 billion revolving loan facility to fund our capital improvement projects. For more information, see “Note 5 -Long-term debt” of Notes to Consolidated Financial Statements.We routinely enter into operational contracts in the ordinary course of our business, including constructioncontracts for projects that are not material to our business or financial condition as a whole. Our commitmentsrelating to these contracts are recognized as liabilities in our consolidated balance sheets when services are providedwith respect to such contracts.49